Report (6th Day)

Part of Health and Social Care Bill – in the House of Lords at 12:00 pm on 8th March 2012.

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Photo of Earl Howe Earl Howe The Parliamentary Under-Secretary of State for Health 12:00 pm, 8th March 2012

I shall gladly seek clarification and, if I have misled the noble Baroness, I apologise. By the time we reach the end of the debate, I shall have made doubly certain that what I said was correct. I hope that the approach that I have just laid out will allay noble Lords' concerns, subject to any clarification that I am able to offer the noble Baroness. I am now told that I was absolutely right in what I said.

One thing that these arrangements may well do is nurture the working relationship between directors and governors. I think that they would help to ensure that directors worked collaboratively with their governors to develop non-NHS activity in the best interests of NHS patients. A planned increase of 5 percentage points or more in one year would be a very significant increase in non-NHS income for any foundation trust. Such an increase would certainly be due to a major development becoming operational, such as a new private patient facility. Requiring governors to vote on such a significant development strengthens directors' accountability to their local communities. However, I take the point made by the noble Baroness, Lady Murphy, about confidentiality. In all of this, we should be aware that the strengthening of the governors' oversight in this way places increased responsibility on the governors to maintain an appropriate level of confidentiality while a new project is initially developed. I would expect the directors and governors to ensure that a foundation trust's constitution would protect that.

On Amendment 218A, in the name of the noble Baroness, Lady Thornton, I think there is a meeting of minds between us on the importance of transparency and openness. It is important that foundation trust accounts give a true and fair view of the profitability of private activities. However, I am afraid that I cannot agree that requiring every foundation trust to produce two sets of accounts-one for NHS activity and the other for private activity-is the right approach. That would impose very high costs on trusts with low levels of private patient activity, which cannot be right. Instead, the Government have given a commitment that they will require foundation trusts to produce separate accounts for NHS and private-funded services; that is to say, requiring foundation trusts with material amounts of private-funded services to produce separate accounts. We think that that ensures the right balance between the costs and benefits of reporting private patient activity.

Finally, we should not forget that there are also existing structures for the overview and scrutiny of the NHS. Those allow for the examination of proposals to extend private patient treatment by NHS providers, if there are concerns that it would impact negatively on NHS service provision.